Frequently Asked Questions
What is a vehicle service contract?
Vehicle service contracts are designed to protect consumers against unexpected, costly repairs to their vehicle.
A vehicle service contract can be purchased by a consumer to cover the costs associated with vehicle repair, including parts, labor, and/or sales tax, for certain repairs or replacements that may be required after a manufacturer's warranty expires. Different contracts have different coverage levels. A given individual's coverage for any given repair is based on the terms and conditions of his or her vehicle service agreement.
How does a vehicle service contract work?
With a vehicle service contract, the contract holder is covered when their vehicle experiences a mechanical breakdown or failure that is addressed by the vehicle service contract.
Simply choose the repair facility of your choice, employing an ASE certified technician, contact the provider's claims center to report the claim prior to repairs. The claims representative then works with the service center to ensure that they receive their payment and that your vehicle is repaired.
Why do I need a vehicle service contract?
A vehicle service contract can offer peace of mind and several other benefits to car owners. Knowing that many of your repair costs will be covered can ease any tension about owning a car. Similarly, unexpected repair costs are minimized because of coverage - making it more affordable to own and maintain a vehicle.
Considering that the average hourly rate for mechanic labor is over $100 an hour, labor alone can be a smart reason to have an vehicle service contract. When you also consider how expensive parts and systems can be to fix, the value proposition for vehicle service contracts becomes that much stronger.
How are claims paid?
The way claims are paid varies from agreement to agreement. In many cases, payments are hassle-free for you because they are paid directly to the service center. In other cases, a contract holder may be reimbursed for repairs made. Often, the policy owner is required to contribute via a deductible payment. The amount of the payment is stated in the agreement and can be adjusted before purchase. Ask your contract representative or review the terms and conditions of your contract for more details.
What happens if I sell my car? Is the contract transferable?
In many cases, a vehicle service contract is transferable. This added benefit can add value to your vehicle when potential buyers are looking into purchasing it. Passing along peace of mind can help make the sale go more quickly and smoothly. So, try to obtain a transferable contract when purchasing.
If you are uncertain as to the transferability of your vehicle service contract, ask your sales representative for this information when purchasing your contract, or refer to the terms and conditions of your contract that you received shortly after your purchase.
What if I want to cancel my contract?
Cancelling within 30 days of purchase will often provide for a full refund. After that period, and if the contract was not utilized, a pro-rata refund may be available depending on what is specified in the agreement. In some cases, an administrative fee may reduce the amount of your refund. Ask before purchasing your service contract what the terms of your agreement allow, including whether there are any administrative fees associated with cancelling. Please contact Auto Allegiance to cancel your contract.
Where can I take my vehicle for repairs?
Most vehicle service contracts allow you to choose any service center that meets the criteria specified in the agreement.. Many contracts require that the facility has an ASE Certified technician. Your contract provider will be able to confirm for sure if a particular service center is acceptable under the terms of your contract. Most dealerships are included: however, please note that some reimbursements are based on aftermarket labor rates which are often exceeded by new car dealers.
If you are unsure of where to take your vehicle for repair, you can typically contact the administrator of your service contract for guidance.
What's the difference between a vehicle service contract and a manufacturer's warranty?
Warranties come with a product and are included in the purchase price. Service contracts, on the other hand, are agreements that are separate from the sale of the product. They are separate either because they are made some time after the sale of the product, or because they cost the customer a fee beyond the initial purchase price.